Telecel plagued by operational crisis

GOVERNMENT is plotting a major shakeup of telecommunications company, Telecel, with the restructuring of both the board and management now on the cards.

The company is in the middle of a major operational crisis and workers frequently engage in sit-in protests over poor working conditions and low salaries.

Government is the major shareholder having acquired the 60% Vimpel Com shareholding in Telecel in 2015, with plans to eventually purchase the remaining 40% shareholding.

Information Communication Technology, Postal and Courier Services minister Jenfan Muswere told the Zimbabwe Independent in an interview this week that major changes are in the offing at the mobile operator.

"There is going to be restructuring of the board and management at Telecel and we are also replacing old equipment. We want Telecel to be profitable," Muswere said.

He, however, did not indicate the timeline under which the restructuring would be completed.

The ICT minister said there is going to be ministerial representation on all entities that fall under his purview to ensure efficiency and profitability. He said the board and management at these companies will be assessed on profitability and warned that those that fail to meet set targets will be booted out.

"We will be assessing numerically. If you do not deliver, you are out," he declared.

According to the 2020 first quarter report by the Postal Telecommunications Regulation Authority of Zimbabwe (Potraz), Telecel's subscriber base fell by 9,4% from 910 677 to 825 478 subscribers. In comparison Econet's and Netone's subscriber bases grew by 5% and 4,9% respectively during the same period. This represents a major slump for Telecel which in 2014 had a subscriber base of 2,23 million people.

Workers at Telecel raised a red flag over the state of affairs at the company in January this year, saying it faces imminent collapse unless the government urgently intervenes to rescue the entity.

In a letter written by Communication and Allied Services Workers' Union of Zimbabwe general secretary David Mhambare on behalf of Telecel workers to Muswere, the agitated employees painted a grim picture.

"Honourable, we write to you as both the minister of ICT and the representative of the major shareholder who happens to be the government of Zimbabwe. We want to draw your attention to the situation at Telecel, which has deteriorated to unimaginable proportions," Mhambare wrote in the letter dated January 15 and also signed by the union's president, Lazarus Kafesu.

"Without mentioning the issue of salaries and wages which have continued to be very low and uncompetitive in the industry, the workers are more concerned with the viability of the business. The business is now technically insolvent and failing to pay creditors; in fact the liabilities now outstrip assets by far."

They also said Telecel's network coverage is retreating at an alarming rate and, currently, only a limited number of subscribers in selected towns and cities can access the network's signal. As a result, the workers said, subscribers are abandoning the service provider en masse.

"The network availability has been cut by more than 65% with only a few towns and cities having network available in the CBD (central business district) or when electricity is available which is during odd night hours," Mhambare revealed in the letter.